The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000 Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Creamy Crisp's explicit costs are $ 150,000 Creamy Crisp's implicit costs are $ 136,000 Creamy Crisp's accounting profit/loss is $ 230,000 Creamy Crisp's ecnomic profit/loss is $ 94,000

The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000 Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Creamy Crisp's explicit costs are $ 150,000 Creamy Crisp's implicit costs are $ 136,000 Creamy Crisp's accounting profit/loss is $ 230,000 Creamy Crisp's ecnomic profit/loss is $ 94,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The following is cost information for the Creamy Crisp Donut Company.
Entrepreneur's potential earnings as a salaried worker = $50,000
Annual lease on building = $22,000
Annual revenue from operations = $380,000
Payments to workers = $120,000
Utilities (electricity, water, disposal) costs = $8,000
Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000
Entrepreneur's forgone interest on personal funds used to finance the business = $6,000
Creamy Crisp's explicit costs are $ 150,000 ✓
Creamy Crisp's implicit costs are $ 136,000 ✓
Creamy Crisp's accounting profit/loss is $ 230,000 ✓
Creamy Crisp's ecnomic profit/loss is $ 94,000

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